Indian banks' recovery will see delay on NBFC, corporate stress: S&P

The growth and profitability of finance companies (fincos) are also likely to remain under pressure, S&P said

The recovery of the country’s banking sector will time a long time because of the stress in the domestic corporate and non-banking finance sectors, global rating agency Standard and Poor’s said on Tuesday.

“Fragile financial markets, rising risk aversion, and weakness in some highly leveraged corporate sectors will continue to stress Indian banks’ asset quality and growth,” said S&P Global Ratings credit analyst Geeta Chugh.

The growth and profitability of finance companies (fincos) are likely to remain under pressure, the S&P report titled “What’s Hurting Indian Banks’ Recovery” said.

Liquidity has tightened and funding costs have gone up.

“We expect the smaller fincos to